10.12 ndian onom
shipbuilding industry has the capacity and services can result in large dividends in the form
expertise but is functioning below capacity. Some of higher services growth and services exports,
of the suggested steps to boost the sector are: which in turn can help in pulling up the economy
(i) need to replace our ageing ships with new to higher growth levels. The future actions in the
ones, sector can be outlined as given below11:
(ii) increasing shipping fleet (with prices (i) India’s services sector, which showed
falling on account of global slowdown), resilient growth after the recovery of the
(iii) a special financing mechanism needs to global economy following the global
be developed. financial crisis, has been showing subdued
(iv) utilising India’s shipbuilding and repairs performance in recent times. Despite the
yards and enhancing their capacity (as slowdown, the prospects continue to be
India needs to replace many old ships bright for many segments of the sector.
and growing ship repairs business in the (ii) In future, government’s focus on the
world). following are expected to provide impetus
to logistics services—
Railways: The FDI policy of Railways sector
restricts FDI in rail transport, except in mass (a) infrastructure development,
rapid transit systems. FDI and privatisation in the (b) favourable regulatory policies like
railways could be the next big ticket reforms. A liberalisation of FDI norms,
proposal has been initiated by Indian Railways, (c) increasing number of multimodal
for making suitable changes in the existing FDI logistics service providers,
policy in order to allow FDI in railways, to foster (d) growing trend of outsourcing logistics
creation of world class rail infrastructure. The to third party service providers, and
proposal envisages— (e) entry of global players.
(i) allowing FDI in all areas of the rail sector
(iii) Though shipping services are at a low key
except railway operations.
at present, with increased imports of POL
(ii) even in railway operations, FDI is (petroleum, oil and lubricants) for stocks
proposed in PPP projects, for suburban build up to take advantage of low crude
corridors, high speed train systems, and oil prices, containerisation of export and
dedicated freight lines. import cargo and modernisation of ports
While privatisation of railways has been with private sector participation, recovery
successful in some countries like Japan, it has of the shipping and port services sector
failed in some others like the UK. So this proposal can be expected.
needs to be examined carefully and quickly to (iv) The prospects for Indian aviation services
allow privatisation and inflows of FDI in areas have improved following—
where it is feasible.
(a) the fall in prices of aviation fuel,
which accounts for nearly 40 per cent
outlInInG future of the operating expenses of airlines
With plenty of opportunities, the services sector in India;
is like an uncharted sea. As yet, its potential has
11. Ministry of Finance, Economic Survey 2015–16,
not been tapped fully by India. A targeted policy Economic Survery 2016-17 and Economic Survey
of removing bottlenecks in major and potential 2017-18.